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The original interments in the cemetery were men who died in nearby Union hospitals during the occupation of the area early in the Civil War, mainly in 1861, following the Battle of Port Royal. Battlefield casualties from around the area were also reinterred in the cemetery, including over 100 Confederate soldiers. It became a National Cemetery with the National Cemetery Act by Abraham Lincoln in 1863. The remains of 27 Unionprisoners of war were reinterred from Blackshear Prison following the war.

In 1987, the remains of nineteen Union soldiers of the all black Massachusetts 55th Volunteer Infantry were discovered on Folly Island, South Carolina. The Massachusetts 55th had been stationed on Folly Island from late 1863 to early 1864 and was a sister unit to the better-known Massachusetts 54th Volunteer Infantry, featured in the film Glory. On May 29, 1989, these soldiers were reinterred in the Beaufort National Cemetery with full military honors. Cast members from the film served as the honor guard at the ceremony.

Capt. Albert L. Schlegel, Jr., US Army Air Corps, served as a fighter pilot with the Royal Canadian Air Force until the United States entered WW II. After transferring to the Army Air Corps, he qualified as an "ace", with 13.5 confirmed kills and 2.5 probables. On August 28, 1944, he was shot down on a mission over Valmy, France. Although he successfully bailed out, he was reportedly captured by German troops and executed. He was interred in France as an "unknown" until 2016, when his body was identified by the Defense POW/MIA Accounting Agency through medical records. He was reinterred in Beaufort with full military honors on March 30, 2017.